Future of WorkTech
Future of WorkTech
Investing in the Future of Work With Allison Baum Gates, General Partner at Sempervirens
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Allison Baum Gates, General Partner at Sempervirens, is an author, speaker and investor in the future of work. Our conversation touches on how the employer employee relationship is shifting, what investment opportunities are emerging over the next few years, and advice for entrepreneurs and senior HR leaders.
Allison's Website.
Hey, everyone. Welcome to the future of work tech, a podcast where we cover the nexus of new HR trends and the technology that supports them. I'm your host, Alexa Dunaway. And today I'm excited to be joined by Alison bomb gates. An author, speaker and investor in the future of work. Our conversation touches on how the employer employee relationship is shifting what investment opportunities are emerging over the next few years and advice for entrepreneurs and senior HR leaders let's get started.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAlison, thanks so much for coming on the podcast. Why don't you start by giving our listeners a little bit of background about yourself and about.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesGreat to be here. I'm Alison BOM gates. I'm a general partner at Sempra Berens. We are an early stage venture fund focused on companies that sell to and through employers as a distribution strategy specifically. The future of work companies within healthcare technology, financial technology and workforce technology.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAnd can you tell us a little bit more about your investment thesis
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesabsolutely. Our investment thesis is really anchored in the concept that the fundamental relationship between employers and employees is being disrupted. We believe that the HR function is in the process of becoming more and more strategic. And there is an explosion of data as Well, as opportunity behind the 80% of budgets that are spent on workforce on average at the company level. So understanding sort of an employee's health, their benefits, their financial wellness, their career development, their trajectory, their goals, all of that has historically been untouched by technology and is now in a position to change and improve as a result of new technology solutions.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawaySo, I guess we've been through some cataclysmic shifts recently, with COVID and all of the responses that HR has had to due to the pandemic. You spoke about this opening up business opportunities. Can you speak to some that emerged recently?
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesOur thesis at some provisions and my thesis as an investor, even prior to Sempervirens has always been that the future of work was going to be more digital distributed. Data-driven. Dynamic And diverse. I like alliteration because I have a bad memory. started as the three days. And then in the middle of the pandemic added the dynamic and diverse components. So I think whenever I've talked about the future of work, historically, everybody has generally agreed with those tenants. but the question was always the timing. I started talking about the concept of the flipped workplace. Five years ago. And when the pandemic happened, it accelerated our thesis by years, if not decades. So we've seen the emergence of a lot of really exciting opportunities. One is an urgency on the behalf of the employer to understand what is happening with their employees. Going back to this concept, I mentioned before. It's generally been a black box. You hire someone, you generally know how they're doing and how happy they are, but they're mostly lagging indicators and performance is a lagging indicator as well. So a big part of what we're doing and the opportunities that we're seeing as a result of remote work are this concept of there's this new trove of data that helps employers understand where their employers are, how they're thinking, what they're working on, how happy they are, how connected they are. All of that is there. It just is up to the employer to understand how to harness and analyze that data in a way that's useful.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAnd what's your take on how that data can best be used? there's obviously a lot of it.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesYeah. It's interesting. HR historically was a more of a administrative function But it's now become highly strategic because more of the administrative tasks are being automated. And that's true for the HR function itself, but also from a general kind of employment category, We've seen productivity increase over the last 20 years, but wages haven't and that's largely because people have been performing less of the work that technology has automated away. And so the workforce is performing more strategic functions. HR is trying to figure out how to understand that and analyze that. And when you're not in a pure time-based pay environment, figuring out how well are people actually doing, what are they contributing to the business? So all of that is really exciting. I think on behalf of the employer to start to gain some more granular data around how people are performing, where they should be investing. And also what people need in order to perform their best. So I think this is a big part of the shift that's occurring right now is moving away from purely quantitative, productivity metrics and looking more at, okay. Yes, it matters what works. I'm going accomplish this today. But it also matters that this person stays with me for a long time, but they continue to grow. Those are all really important factors that are influenced by. Preventing burnout, making people feel connected, providing them with mentors, giving them the right health care benefits, fertility benefits, mental health care childcare, et cetera. And so I think data can be used to help create a very clear ROI case for employers and providing those type of benefits that will ultimately trickle down to their bottom line. But they might not really have been able to quantify that before. And then on behalf of the employee, I mean, the data is so exciting to be able to get a clear pathway to where you want to be understanding where skills are best use, opening up new possibilities. You know, I think we've seen culturally a shift in what people expect to get from work, wanting more mission-based work, wanting to create a portfolio of jobs and experiences and not just climb the ladder at one organization. And so being able to take more con more control over your own job, career productivity, et cetera, is a really exciting proposition as well. If you know how to do that.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAnd to extend a little bit what you were just talking about, you spoke about how we're now able to pick up new metrics to build that ROI for things that were typically much harder to make the case for. And so for entrepreneurs who are listening or for a senior leadership within HR that is making the case to their leadership or to other business functions, how should they be thinking about building that case?
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesWell, data's obviously a really important piece of it. But I think it's also in this goes back to the question of timing. We, as investors every time we invest in a company, we think about the five T's right. It's, team technology, Tam terms And timing and timing is arguably the most important one because it's the one that you actually don't have control over in a lot of ways. There's a phrase in Japanese, which is describing this concept. They call it reading the air and it's kind of getting a sense of which way the wind is blowing. And so one big mistake I see founders make is believing that they've found a very clear case for calculating ROI for their customers. But in fact, the customers never believed those ROI numbers, right? You might launch a pilot with a company and say, look, you know, we started on March 15th and we ran the pilot for three months. And as of the end date, your retention rates have gone up by X percent. Therefore we have demonstrated ROI for you. And the company will often say, okay, that's great. But like, I also did these other 15 things during those three months. So. How do I know it's really as a result of your pilot? So I think people have to emotionally be bought into the concept of what problem you're solving and the fact that you can have an influencing factor in it. And often that emotional response to what you're doing is more important than the. ROI. I think it would be hard to have the emotional buy-in without the ROI calculation, but the ROI calculation alone is not usually enough.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAnd when there is that mismatch, how should people think about solving it.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesA great question. I think another piece that's really important is transitioning away from should, especially when we're talking about people, it's easy to fall into this trap of creating this moral obligation, right? Like you should have more diversity at your company. You should support women. You should provide these types of benefits. If you think about even ourselves as individuals, there are so many things we should do that we just don't because they don't matter enough for us at that moment. I mean, I shouldn't have just had chocolate after lunch, but I really wanted it and it was delicious. And, I know the things that I need to do to be healthy or to lose weight or whatever you're trying to do. But those aren't necessarily the things that determine whether or not you do them that day. So I think, reframing. ROI reframing into a, I understand your goals and this is how I'm going to help you reach them as opposed to you should do this because it's the right thing to do.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawaySo I want to switch tracks a little bit here and circle back to something you were talking about earlier, about how timing is everything. I'm curious, because you see a lot of different companies coming across your desk. What within the HR tech world, are we at the tipping point of right now? And what's coming down the pike, two or three years down the road.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesan interesting question. One of the areas that we're investing in quite a bit right now is the API effication of the HR tech stack. We've seen similar trends in FinTech InsureTech, and to a certain extent, healthcare tech, although in many ways they're a little bit behind even where HR tech is. But there's all these really interesting application layer opportunities for automating workflows, helping HR, units, understand people better. But The first step is actually, allowing or unleashing the data, which is currently siloed within the HR tech stack. So you have very different kind of pools of data, whether it's payroll, data, healthcare, data. Employee engagement, data, performance, data, pay data. All of those things are currently living extremely separately. And so what we think there is a really exciting time for right now is to actually unlock that. So the data can be aggregated and turned into something meaningful and, sufficiently complex to provide a real picture into, the. workforce and into workforce health overall That's one area where we think the timing is right. the technology is there at the infrastructure level, and now it's just a matter of unlocking all of that exciting stuff right now. I was just talking to one of my partners earlier today and we were talking about the fact that we are in the business of being wrong most of the time.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayFair enough. You won't hold you to anything else.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesso you, you can't can't hold me to it. One thing I've been talking about for several years is, mental health care and how important that is and how we're in the process of that really going mainstream. We're investors in spring health, we're investors in path we're investors in bright line health. So there's been this real, paradigm shift in terms of cultural acceptance. And awareness of the fact that mental health is just as important as physical health today. So we've reached a tipping point there. What I'm really interested in is what that trickles into as an extension. Brightline health is a great example. They're doing behavioral health care for children, teens, and adults. and, that's been only really possible because parents have realized that they need to take care of their mental health care. So trying to figure out what are the next extensions, what are the next layers of the onion that are going to be peeled back as a result of this, real shift in mental health. And I think actually women's health is another area where we're seeing a similar tipping point. And this goes back to the data piece as well. women's health is, is not a straightforward thing. anybody's health is very complex, but particularly for women, I think there's so many different layers and areas of medicine that have not yet been addressed. And so we're very actively looking into that space and understanding the employer's role within it
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayI know it's impossible to predict the future, but I'm going to ask anyway, if you have the think, three, five years down the road, what problems will be solved will still be an issue for employers that, entrepreneurs thinking about the future and potential business opportunities should be.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesYeah. There are a couple o f different areas. Again, I always go back to this shift between the relationship between the employer and the employee, and, you know, post-World war two in a booming economy, there was this expectation that your employer took care of you. They provided you with healthcare purpose and identity with a pension. It was the center of your life. And it was meant to last as long as possible. And that was something that could create a really promising career path, both financially and from an impact and a legacy standpoint. and that is basically gone. And so how does the societal infrastructure around that adapt how to employers. Figure out what is their new relationship with employees? But more importantly, I think as individuals navigating the future of work ourselves, what role do we have in pushing that forward and shaping it in a way that works for us and the gig economy and the emergence of remote and flexible work has been great. and we've seen an, an explosion in new tools that help individuals navigate how to have more of a portfolio career, do more freelance work, be a creator, et cetera. I think employer are still figuring out how to adapt to that. Any employer that you speak to would say I'd much rather hire someone full time. That's my main focus I want to hire and keep, the people that I choose. And I just think that isn't going to be possible. I'm not exactly sure what the exact timing is, where there will be a reckoning where employers are forced to recognize. Just isn't realistic to expect your new hires to stay with you for 20 years anymore. and that means that you're going to have to hire. teams of freelancers, you're going to have to do more project-based work. You're going to have to share employees with other companies, all of that. I don't think we're quite there yet, to be honest. So I would say at least another three to five years, but that's something I've got my eye on. I'm trying to understand, when is there going to be a little bit more of an acceptance of alternative employment arrangements.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayyou write a lot about the flipped workplace. And so maybe this is a really interesting time to bring that in
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesYeah, it's a term that I coined a couple of years ago when I first started investing many years ago was investing primarily in ed tech and a lot of technology for the flipped classroom. And the flipped classroom was a movement in education where teachers basically realized that. It was a waste of time to have students come into a classroom and force them to learn all at the same pace and then send them home to be alone where they end up asking all their questions, doing their homework and synthesizing what they just learned. So some very intelligence teachers basically said, why don't we reverse? And flip it on its head and have students consume information at home and then only come into the classroom to collaborate, to work together, to be coached essentially. And not only did this allow individual students to learn at their own pace and in their own ways, but it also transformed the role of the teacher, from, a master of the class and, an. Defacto expert on everything and more to a coach and the facilitator. And I think we're seeing the same, evolution in work as well. And so my, application of that in the work context was a flipped workplace where we as individuals no longer go into an office from nine to five where our presence is equated with productivity, but instead we're able to do our individual work independently in our own place and our own space, and only come into an office to collaborate with people, to ask questions, to build connections and relationships, to do highly strategic work and. That unlocks so many exciting things. it makes diversity truly possible because people that have different lifestyles or preferences or flexibility requirements, or even some people are morning people, and some people are evening people, they can work in the way that works best for them. ultimately, yielding better results for everyone. So it was really excited about this concept. I think again, started talking about it and many people were like, oh, that's a really interesting idea. but there was really no catalyst to shift toward that model. And then when the pandemic happened, all of a sudden. we were forced into understanding that, I think re-evaluating the role of an office versus individual work. Now longer term. What this also means is similar to what happened in the classroom. You know, fundamentally flipping the relationship between employers and employees. I think many people go to work expecting to be told what to do. They expect their employer to provide a career path for them. That their employer could tell them, this is what success looks like, but actually that's been flipped on its head. And now that's up to us, which with great power comes great responsibility. And if all of those things are up to you, we really do have to think in a different way.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAnd then the midst of these ongoing shifts of the fundamental. Um, relationship between employers and employees. what recommendations or advice might you have for CHRs or senior HR leaders who want to be at the forefront of these ongoing
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatestrends. big Two big recommendations. One is to join a community, of peers that are similarly committed to, transformation, evolution, innovation. And so surrounding yourself with people that are thinking in the same way, excited about the same things will keep you moving forward and motivated. Because there's so much gravity pulling you back to the way things were. So it does take an effort, a shift in mindset and relationships to maintain a commitment to moving forward and innovating, and being on the cutting edge. the second piece is try things. I talked to tons of CHRs who say, this is interesting, and this is interesting, and this is interesting, but get something done if it doesn't work out great, but at least you're learning from that. And the best place to be learning And evolving is when you're in action. And, you know, I think it can be hard. Obviously. I think everybody in HR understands the importance of what they do and the fact that. You can't just try things, Willy nilly, but there's an intelligent way to, take a lean startup approach. Try something small, expand from there. Otherwise you'll just be sitting on the sidelines forever.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayAnd on the other side for those entrepreneurs who are in the space, trying to capitalize on these trends, how would you.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesUnderstand your market, talk to your customers, build relationships with and try to do so in, not in a transactional way, but more in a way of truly trying to gain an understanding of how you. can add that. To them, you know, ask questions about what problems you can solve, how big are those problems? What are the barriers to those problems? Having been solved before, being thoughtful and trying to start from a position of adding value versus, a sense of entitlement to be able to sell something is, is really powerful and goes a long way.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayRemoving the sheds. Right?
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesExactly. Exactly.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawaySo as we close here, what are the two to three most exciting startups that you know of in this space or for people to keep.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesDoes that it's so hard. We have, a portfolio of more than 40 companies. So I love all my children
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayChoosing a monster.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesis what we, what we like to say. so it's hard for me to just pick a few, I'll talk about a few of our more recent investments that are early, but we're really, really excited about. we just made an investment in a company called Presidio, which has a product called pro care leveraging data from multiple sources within the HR tech stack to help HR leaders actually predict up to six months. Who within their teams are most likely to leave. And why? So not only do you get that kind of forecasting ability, but also recommendations for how to prevent it. so we're really excited about that as an application of data. I mentioned Brightline health, previously, which is behavioral health care for children, a huge need something we've heard consistently from both employers and parents everywhere. Mental health has been a huge issue during the pandemic. Not only for them, but also for their kids, in bright light provides clinically validated care that is in network with insurance carriers. So also helps remove that cost barrier, unlock access to healthcare for people that need a, both.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayThanks so much for joining us. Alison, if you had to leave people with any final message or last words, what would it be?
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--guest637175--allison-baum-gatesHmm, that's a good one. yeah, maybe we just go to the theme of this conversation, which is remove the, should stop thinking about what you should do and start thinking about what you can do, what you will.
allison-baum-gates_recording-2_2021-09-08--t08-04-41pm--611cb375b4b52d00890f4673--alexeidunawayFantastic. Well, thanks so much. It's always a pleasure to chat and look forward to continuing our conversations.
Alexei IntroductionThat's all for today, please subscribe and stay tuned for more conversations with investors, HR, practitioners, and entrepreneurs in the future of work ecosystem.